Investing in "Blue Gold"
An Investment U White Paper
by Tony Daltorio and the Investment U Research Team
Despite its fundamental importance to life, water is often taken completely for granted. Too many people think the world will never run out of the commodity.
But while there is plenty of water on this planet we call home, only 2.5% of it is fresh, drinkable water. And much of that is locked up in glaciers, groundwater and soil.
Less than 1% of the world's supplies are easily accessible fresh water.
This precious supply is under tremendous stress. Marcus Norton of the Carbon Disclosure Project said, "The effects of climate change, increasing population, urbanization, per capita demand and pollution damage to supplies will put even greater pressure on these limited resources."
Consider how in 1900, the world's population was only 1.6 billion people. Today, that number has grown to about 6.5 billion and water consumption has swelled by six-fold since 1900. And by 2025, it is expected to hit 9 billion, putting even more pressure on the Earth's scarce fresh water resources.
Already, about 40% of people around the globe don't have access to clean water, including 15% of Latin America. A continent away, two thirds of China faces similar shortages.
Meanwhile:
- The World Health Organization estimates that 80% of all sickness stems from unsafe water and sanitation. Each year, five million people – many of them children – die from water-related diseases.
- The United Nations forecasts that by 2030, almost half the world's population will live in areas facing water stress or water scarcity. Already, over 80 countries are facing critical water shortages.
- The Population Institute says global demand for fresh water already exceeds supply by 17%.
- The International Food Policy Research Institute claims that by 2020, we will need 20% more water than is currently available.
- The 2030 Water Resources Group estimates that global water requirements will soar by over 50% over the next 20 years.
The price of water may be rising, but no one complains when buying the stuff, even though it costs twice as much as gasoline, which we'll gladly gripe about.
That's why the current and worsening shortage is leading to an exploding bull market in the world's most precious commodity and the companies involved in the industry.
Investing In Water…and Taking Advantage Of The Supply Gap
The global water industry is currently a $460 billion market. And as the population grows, pollution increases, supplies become more scarce and more strain is placed on water infrastructure, it's no surprise that many have dubbed water "blue gold" because of its immense profit potential.
According to Fortune: "Water is one of the great business opportunities. Water promises to be to the 12st century what oil was to the 20th century: the precious commodity that determines the wealth of nations."
And it's easy to see why investors are dubbing it one of the most profitable plays out there. Demand already outstrips supply by a wide margin… and the gap is getting bigger. We've already mentioned that the population of the earth is growing at an exponential clip – 1.5% – 2%. What we haven't said yet is that our water use is growing even faster at 2.5% – 3%.
When you take in household use, crops, bathing and drinking water, the average person goes through 232 gallons a day. Much of that comes from agricultural needs, which account for about 70% of all water usage. And we all know how important our crops are.
Jeffrey Sachs, director of the United Nations Millennium Project, put it bluntly: "The world is running out of water. We need a radical plan to tackle shortages that threaten the ability of humanity to feed itself."
It's not just agriculture… A whole range of economic activities and industries will be affected globally by water shortages. Industries from the food and beverage industry to the energy industry to high-tech industries such as pharma and semiconductors rely on blue gold in order to function properly.
Fortunately, there are solutions out there… and if you invest in the companies providing those solutions, you're bound to make a tidy profit.
Four Profitable Sectors to Invest in to Help Solve the World's Water Issues…
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Related Investment U Articles:
- The “Oil of the 21st Century”… And How “Blue Gold” Can Make You Rich
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